Closing your DC scheme

Key points

Notify us that you are winding up your defined contribution (DC) scheme.

Submit a winding-up report if your scheme has not fully wound up two years after wind-up was triggered.

Complete at least the key wind-up activities within two years of starting the process.

Deciding whether to close your scheme

You and/or the employer may decide that you should close the scheme for a number of reasons. For example, you may decide that your scheme can’t meet the standards set out in the DC code.

You should also be aware of when compulsory winding up of the scheme can be triggered, eg the scheme rules may require the scheme to be wound up if no participating employer remains or The Pensions Regulator may direct you to do so.

Telling us

If you decide to wind up your scheme, you must notify The Pensions Regulator. You can notify us using Exchange.

If the scheme has not fully wound up two years after wind-up was triggered, you must submit a winding-up report. You can submit the report using Exchange.

Key wind-up activities

The key activities you should complete when winding up your DC scheme are:

receive or recover all member and employer contributions due from the employer

establish that all pensioner members with annuity policies have them set up in their own name providing the correct scheme benefits

produce and sign-off final accounts accounting for and reconciling all assets/cash held in trustee bank accounts and investment manager/provider accounts

establish that all other beneficiaries have been identified, fund values determined, secured and statements issued

provide appropriate options to members

Take advice where it’s appropriate to do so.

Timescales

You should complete at least the key activities within two years of starting the wind-up process.

You should create a project plan to help you meet the two-year timeframe.

To avoid unreasonable delays you should adopt a pragmatic and proportionate approach. However, you still need to work in line with the provisions of the trust deed and rules, your fiduciary duties and any legal requirements.